Moray Council voted yesterday to stay a member of local government umbrella body Cosla, despite a continuing row over a £4million funding shortfall.
Council leader Allan Wright had earlier said that the local authority should quit the Convention of Scottish Local Authorities.
However, there was cross-party support to re tain Cosla membership at a specially called meeting of councillors yesterday.
The funding row, which has already seen Aberdeen City Council leave Cosla, stems from allegations that several local authorities are being short-changed at the expense of their counterparts in the central belt.
An updated formula was agreed last year on how to distribute central funds by the Scottish Government and a Cosla working party.
In an unprecedented move, the agreement was narrowly rejected in September by the majority of the leaders of Scotland’s 32 local authorities, who together make up Cosla’s main body.
Instead, Cosla voted to freeze the formula. This meant that “indicators”, mainly based on population growth, were not taken into account as is usual.
As a result Moray Council now stands to lose out on £4.274million in revenue funding and £225,000 in capital funding for the 2015-16 financial year.
This amounts to a 2.78% funding loss for the region, the biggest in percentage terms in Scotland.
Instead of withdrawing, Moray Council agreed to lobby John Swinney, the cabinet secretary for finance, to impose a fresh settlement on Cosla.
Speaking after yesterday’s meeting, Mr Wright said: “I have a clear mandate to continue to press for a needs-based allocation of resources in 2015-16, but without threatening to withdraw from an organisation that serves Moray well.”
Councillor John Divers, the leader of the council’s Labour group, gave his approval to yesterday’s decision. He said: “To leave Cosla you have to give 12 months notice, so it would make no difference to next year’s budget. So it’s something of an idle threat, in my opinion.
“I think we’re better trying to influence things from inside. If we did leave we’d possibly be left in a situation of having to accept whatever cash settlement the Scottish Government decided to give us.”